World View & Market Commentary. Forest first; Trees second. Focused on Real & Knowable facts that filter through the "experts" fluff and media hyperbole. Where we've been, what the future may hold and developing a better way forward.

Monday, May 9, 2011

Equity futures are up slightly at the open this morning, the dollar is up again, bonds are flat, oil is higher and challenging $100 from below, gold and silver are strongly higher, and most food commodities are higher as well.

No significant economic data today, and the rest of the week is fairly light with the highlight being PPI, CPI, and International Trade.

I see exactly no beef, all I see is fluff and a public that has been totally hypnotized with disinformation. Not one shred of evidence to support the Bin Laden storyline (sorry, but that video released this weekend is a joke), no one is investigating an obviously tampered Birth Certificate presented by our President, and meanwhile the truly important stories drop from everyone’s attention, like the fact that we’re brewing another war in Libya, trying to brew one in Pakistan, and we’re still ignoring the fallout from Fukushima.

The business media is definitely all fluff – I watched a report that centered upon the question, “Was the ‘investment’ the American public made in GM the best public investment ever?”

Gee, and I’m not being led anywhere by the way they framed that question, am I? Of course they roll out the happy idiots who have no remorse at taking fluff money to shill a mindless storyline. Not one person even hinted what would have happened had they been allowed to fail – like the possibility that new companies would have been allowed to start up and bring truly innovative products to market. Alternatives are not allowed to be discussed when shilling is in progress.

Just like people who see alternatives to the storyline being offered by our politicians are ridiculed in the press for having alternative opinions or for even, heaven to Betsy, asking for proof of ridiculous assertions. It’s stunning to me the wide acceptance of the storyline when it is accompanied by absolutely no proof and completely unbelievable assertions. In fact I believe there are several assertions in the official storyline that are outright lies – a couple are even physical impossibilities like the timeline presented to test and compare his DNA. Again, they have made this a matter of faith, like religion, but I must remain agnostic until convinced otherwise. Actually I lean more to disbelief as the evidence and reality do not match the storyline.

Yet no reporter questions, for they know that if they do they will have no job in order to feed their family and to keep them in the lavish lifestyle which they are now accustomed to. For those who feed the storyline Kool-Aid are rewarded, while those who question it are passed off as whack-jobs.

Thankfully in Japan the Prime Minister ordered CHUBU Electric to shutter the most vulnerable nuclear plant in Japan – Hamaoka. This is a step in the right direction, and it’s still unfathomable to me the way our own government is ignoring the risks. Again, it’s a sign that total government capture has occurred by the special interests.

Greece was downgraded once again – Europe is simply a debt saturated mess where few wish to acknowledge reality. The central bankers made it known that they expect “collateral” for their worthless money loans, and fortunately it looks like they are being told to pound sand. Finally talk of “restructuring” is occurring, just don’t call it “default” though because that might sound bad and we can’t handle that because it would mean that something might have to be done about the criminality of the way the central bankers are acting.

Turning back to the U.S., let’s talk about the long term market situation. While the hot money printing, HFT, and market manipulation has propelled equities to new fluff heights, there is a long term glaring non-confirmation now in place. That was set up when the Transports closed last week at a new all-time closing high, but the Industrials are still more than 1,450 points away from its new all-time high:

TRANSPORTS:

INDUSTRIALS:

Yes, they can simply gun the Industrials higher to erase that situation, but I want you to consider that the current crop of POMO money is about to run out – and they are talking somewhat hawkish about QE3. As you buy a rising market to buy it still higher, the cost to do so gets progressively more expensive - this means that each injection to maintain that trajectory must get larger. If they delay QE3, then the market will likely stumble and this stumble may occur prior to this confirmation. Big non-confirmations like this are often seen at major tops, so this is one to watch over the next few weeks and months.

Since we’re looking back to the 2007 peaks, I just want to point out the XLF… it STILL has failed to break even a 38.2% retrace making it STILL the worst performing sector of them all. All those trillions, all the taking off their balance sheets of toxic waste, all that mark-to-fantasy accounting, all those perfect HFT trading rob you blind quarters… all of that, and yet they still are hugely divergent from the rest of the market:

So, the storyline goes that we’re supposed to believe, and not even question, an obviously tampered birth certificate, an obviously fabricated Bin Laden storyline, and a stock market built upon money printing and manipulation where the Financials trail far behind, and where our economy still is not producing positive jobs (but the storyline says it is), where housing is still in the gutter, and where oil prices rise (and fall) wildly despite record high inventories and falling demand. Sorry, but I have to ask, “Where’s the beef?”